The Best Industries for Starting a Business in 2010
Congratulations: You have survived the recession. Now what? If you have ever had the urge to start your own business, now may be a good time to make a move.
To help identify the most promising industries for start-ups, a team of Inc. reporters hit the phones and scoured the data – from the Bureau of Labor Statistics and from private research groups such as Sageworks, IBISWorld, and AnythingResearch.com.
Some of the industries we have identified may surprise you. Start-ups that provide a measure of reassuring comfort in our newly cost-conscious era are doing particularly well. Call it the cupcake factor. In addition to bakeries, these sectors include hobby and craft shops, businesses that sell musical instruments and online vintage clothing boutiques. Then there are the ever-expanding storage businesses that supply the space where a lot of that stuff tends to end up. Or, if you are in the mood for more adventure, how about launching a passenger ferry service? Following are 10 of the best industries in which to start a business in 2010.
Helping homes and businesses go green is a $17.75 billion-and-growing industry. Environmental consulting is expected to grow 9 percent a year over the next five years, according to IBISWorld, a publisher of U.S. industry research. This industry is well suited to independent contractors with the skills to install environmentally friendly gear such as wind turbines, solar panels, and green roofs. (Read more.)
Mobile Application Design
Sure, iPhones have been around for a while. But with the advent of the iPad, Android phones, and a growing market for mobile apps that work on any Web-enabled phone, there is plenty of fresh territory for programmers, developers, and designers. A particularly hot area for new companies is location-based apps (Loopt and Foursquare are the big ones right now) that work with smartphones' GPS capabilities. This sector has the potential to grow at the same scorching rate at which social media websites such as Twitter and Facebook have grown in recent years. (Read more.)
As highways in and around urban centers become more congested, the old-fashioned ferryboat is making a comeback. Privately run ferry services, as well as tourist excursions, are thriving along the Pacific Northwest coast and on the Great Lakes. Given that new federal spending for building ferryboats and terminals is part of the 2009 economic recovery act, opportunities are expanding. The industry grew 17 percent last year, according to AnythingResearch.com. Barriers to entry, though, are steep. A new Coast Guard-certified ferryboat that carries 150 passengers costs about $6 million. (Read more.)
Fun and Games
Craft and hobby supply shops, as well as stores that sell toys and games, have been outperforming the overall retail industry, growing at an annual rate of 9 percent, according to AnythingResearch.com. Musical instruments and sporting goods are also selling briskly. (Read more.)
Bakeries, pastry shops, and bagel stores are growing at 5 percent a year, according to AnythingResearch.com. Small indulgences, it seems, are picking up, whereas big purchases such as vacations are not. People are also willing to pay more for gourmet baked goods, says blogger and baked-goods expert Nichelle Stephens. High-end bakeries are "focused on small batches, local suppliers, seasonal ingredients, and lots of creativity when it comes to flavors and combinations," she says. (Read more.)
Tea and Healthy Beverages
The top four teamakers control 88 percent of industry revenue, according to IBISWorld. But the remaining 12 percent represents a $264 million market for small, independent manufacturers. The industry averaged annual growth of about 5 percent over the past five years. Healthy beverages with promising growth prospects include antioxidant-rich juices and vitamin-enhanced waters. (Read more.)
Crafts and Vintage Clothes Online
Anyone with something to sell – especially in the thriving areas of handmade jewelry and vintage clothing – and a PayPal account can break into this business. Online sales of independent merchants – mostly via sites such as Etsy, eBay, RubyLane, and Supermarket – grew at an annual 6.6. percent over the past five years, according to IBISWorld. (Read more.)
Exam Prep and Tutoring
Parents always want their kids to do better on tests. A large number of adults returning to school are also looking for an edge. Given the low barrier to entry, this field is competitive. But if you carve out the right niche, it could be lucrative. The industry, which includes tutoring in such subjects as special education, language, and music, grew about 7 percent last year, according to AnythingResearch.com. (Read more.)
The U.S. military, the health care system, and businesses that are expanding overseas are the industry's best customers. Overall, the market grew some 18 percent last year. There are also related tech opportunities in the burgeoning market for mobile on-demand translation via SMS. (Read more.)
There are already 2.2 billion square feet of self-storage in this country, according to the Self Storage Association. That translates to more than 7 square feet of storage per U.S. resident. But the industry is far from saturated, thanks to the insatiable appetite of American families for acquiring stuff. The $22 billion industry also has low barriers to entry, which helps explain why independent business people own 90 percent of self-storage companies. (Read more.)
CHRISTINE LAGORIO-CHAFKIN | Staff Writer | Senior Writer
Christine Lagorio-Chafkin is a writer, editor, and reporter whose work has appeared in The New York Times, The Washington Post, The San Francisco Chronicle, The Village Voice, and The Believer, among other publications. She is a senior writer at Inc.